During October, Rover Industries produced 37,000 units of product with costs as follows: Direct materials $ 94,000 Direct labor 48,000 Variable overhead 23,000 Fixed overhead 167,000 $ 332,000 What is Rover's unit cost for October, calculated on the variable costing basis?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
During October, Rover Industries produced 37,000 units of product with costs as follows:
| Direct materials | $ 94,000 |
|---|---|
| Direct labor | 48,000 |
| Variable |
23,000 |
| Fixed overhead | 167,000 |
| $ 332,000 |
What is Rover's unit cost for October, calculated on the variable costing basis?
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